Co-ops hold onto niche

Member-owned stores say supermarket competition may have its advantages

By CHRIS CHURCHILL Business writer

Published 12:01 am, Thursday, October 6, 2011

ALBANY -- Honest Weight Food Co-op is moving ahead with its plan for a new and larger store, despite the neighborhood's rising grocery store competition.

The Albany store has secured a letter of intent for private financing that should allow it to go ahead -- finally -- with new construction on Watervliet Avenue Extension.

The site, however, is nearly adjacent to a location planned by ShopRite, the New Jersey-based chain that on Sunday opened its first Capital Region store in Niskayuna. A new ShopRite along Central Avenue also might spur upgrades to nearby Price Chopper and Hannaford stores.

But, the more the merrier.

"I still feel great about the location," said Duke Bouchard, Honest Weight's chief financial officer. "Being near other grocery stores is typically an advantage for (natural foods) co-ops."

That's because shoppers at traditional supermarkets will migrate to co-ops for at least some of their buying, Bouchard said, if the co-operative offers natural and organic products that larger stores avoid.

The new Honest Weight carries an $11 million price tag, including construction and equipment, that will be aided by a $6.5 million commercial loan that is pending an appraisal. Other funding will come via loans from member-owners and supporters, cash reserves and secondary lending sources, Bouchard said.

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The 30,000-square-foot new building, with 18,000 square feet of shopping space, would roughly double the size of the co-op's existing Central Avenue store, which suffers from a cramped parking lot and limited visibility.

The Central Avenue ShopRite is planned at 60,000 square feet, according to documents submitted to the city. ShopRite has not officially announced the store.

Honest Weight's optimism toward more competition is shared by at least some supporters of the Niskayuna Co-op, which is across Balltown Road from a ShopRite that has been jammed with shoppers during its initial days.

Co-op assistant manager Rit Gabree said the store has seen an influx of new faces since ShopRite's opening and predicts the grocery will survive by offering a very different experience.

A third co-op, on Congress Street in downtown Troy, is celebrating its one-year anniversary, but continues to struggle with financial problems, despite a sales uptick in September.

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"We haven't turned the corner," said Steven Muller, who heads the Pioneer Food Market's board. "We're still trying to find the product mix and business strategy that will bring in the level of business we need to be sustainable."